Redevelopment group targets cuts

Association may file lawsuit against state to prevent $350 million from being taken away from California cities.

November 05, 2008|By Jeremy Oberstein

BURBANK — A Sacramento-based redevelopment group is pressing forward with a lawsuit that would stop the state from taking $350 million from its cities, including Burbank, that officials said is needed to help California shore up its burdensome deficit.

Following the prolonged budget impasse, in which Gov. Arnold Schwarzenegger signed a $145-billion spending plan in September that was 85 days late, legislators voted to take $350 million from redevelopment agencies around the state.

Burbank’s share totals $16,357 from libraries, $17,995 from the Community Option Public Safety program and $3.3 million from its redevelopment agency, which funds local construction projects.

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The California Redevelopment Assn., which represents 350 agencies and more than 300 private development firms, is on the brink of filing a lawsuit against the state after its board voted in October to officially oppose the price tag cities are being asked to pay, said John Shirey, executive director of the association.

If Burbank is asked to pay the funds, which amounts to 33% of the capital improvement budget, development projects will likely be affected in the short term, Community Development Director Sue Georgino said.

“It obviously has implications for us,” she said.

Burbank and the California Redevelopment Assn. have long objected, mostly on constitutional grounds, to the state taking funds for capital improvement projects.

The state is not legally entitled to take redevelopment funds, Shirey said, citing Article 16, Section 16 of the California constitution, which reads: “All property in a redevelopment project . . . [shall] not subject to taxation.”

“We feel what the state, as local governments have to do, is find ways to balance budgets by cutting its expenses or raising revenue or both,” Shirey said. “The solution is not to take money from someone else. Once state takes the money, this isn’t going to stop.”

Georgino also fears that state officials will continue to tap local funds as California continues to face a fiscal problem.

“We have a very strong concern that it’s not just one year as an illegal take, but that it’s an ongoing take,” she said.

But state officials have maintained that the $350-million payment is a one-time fee.